Definition
Money an association sets aside, separate from its operating account, to pay for major repairs and replacements of common components — such as roofs, paving, and elevators — when they reach the end of their useful lives.
Reserves are funded by a portion of regular dues set by the board, guided by a reserve study. A well-funded reserve is the main defense against special assessments.
Reserve money should be kept in its own account in the association's name and used only for reserve purposes.